'Digital Age' skirts rural America

Sparsely populated areas, especially in West, are missing high-tech infrastructure vital to 21st-century economy.

Making its way across the rural West, the Information Superhighway more closely resembles a rutted dirt road.

Fort Morgan, the picture of small-town America settled on the vast northeastern plains of Colorado, is a case in point: Here, antiquated phone service and snail-slow speeds for data-transfer impede economic development, affirming the Information Age axiom that those who can't keep up with technology get left behind.

Indeed, regional experts increasingly worry about the emergence of a new "digital divide," in which small towns that don't have high-speed communications capabilities will be bypassed in the economy of tomorrow. Like proximity to rail lines and rivers in the 19th century, access to fiber-optic trunk lines and other ways to move billions of bits and bytes will help determine which communities prosper in the 21st.

"This goes to the heart of economic development in the new economy," says Phil Burgess, president of the Center for the New West, a public-policy research institute in Denver. "What we have ... is a 'red-lining' - where less-populated areas are just cut off from services."

Situated off an interstate 75 miles northeast of Denver, and only an hour from the airport, Fort Morgan, at first glance, looks like a typical farming community: grain silos, a tractor dealership, and no video chain in sight.

But there are signs of modernity, too: computer stores, the occasional cell phone, and children cruising the Internet at the local library. What's missing is the gee-whiz infrastructure needed to support the high-speed communication and work of tomorrow.

Like many rural communities, Fort Morgan wants to help its existing businesses prosper, as well as attract new ones. But without high-speed communications, businesses are going elsewhere.

"There's definitely a real need for high-speed capacity telecommunications - we're talking about for Internet, Intranet, faxes," says Raymon Sieler, city superintendent in Fort Morgan.

The wide-open spaces of the West make the predicament most salient here. Yet sparsely populated areas in the South and Midwest are similarly affected.

Phone deregulation

Rural America's communication woes can be traced in part to the Federal Communications Commission's deregulation of the telephone industry in 1996. It took away billions of dollars in subsidies to regional Bell companies, which used them to provide service to the far reaches of the US. While deregulation opened up free-market competition for carriers, it also exposed a stark business truth: It costs phone companies far less to supply phone service to urban populations than to little towns scattered across the countryside.

And in today's free-market telecommunications system, that cost differential has created an information society of "haves and have-nots," says Mr. Burgess.

Earlier this month, the Center for the New West hosted a series of two-day conference in Colorado Springs, Spokane, Wash., and Helena, Mont., to address this so-called digital divide.

Underlying the controversy is a fundamental question: Is advanced telephone service a right or a privilege? President Clinton recently said every citizen should be guaranteed access to the same speed of service, for the same price. But does that mean the federal government should subsidize high-speed communication the way it helps pay for highways and parks? A growing number of people in the West believe so.

Because stringing hundreds of miles of cable over mountain passes and across prairies isn't lucrative for carriers, they instead often "cherry pick" big business customers in population-dense areas. Large local providers - like US West, which supplies phone service in 14 Western states - must still service rural customers. But they aren't required to upgrade service. In Fort Morgan, for example, party lines were eliminated only two years ago, and many "premium" phone services (like last-call return) still aren't available.

Nor can US West justify the expense of upgrading rural service now that its urban profits are being siphoned off by competitors like MCI and AT&T, says David Beigie, communications director for US West. "It's Economics 101. Eighty percent of the revenue base comes from 20 percent of the customers," he says.

In heavily populated New Jersey, there are 30,000 low-cost customers to offset the expense of serving one high-cost customer, Burgess notes. But in Western states, there are only 24 low-cost customers for every one high-cost resident. The West gets the short end of FCC rules, critics say.

Superslow bits

In Colorado, the Public Utilities Commission requires that phone customers get a minimum data-transfer speed of 2,400 bits per second; but urban customers enjoy speeds up to 56,000 b.p.s.

Slow speeds translate into failed Internet connections, poor-quality faxes, higher long-distance bills, and more time spent accessing and downloading online information. "It's the World Wide Wait, instead of the World Wide Web," says Burgess.

And that's bad for business. "In telecommunication, everyone should be on the same playing field, just as everyone gets the same power of electricity," says Cathy Shull, executive director of the Fort Morgan Area Chamber of Commerce. "This affects everything we do in a rural community, including health-care, public safety, and education."

Doctors in small towns, for instance, often need to consult with experts at larger hospitals. Especially in emergencies, they have difficulty providing the best care if they can't quickly transmit an X-ray image or test results over a fax or computer.

The Fort Morgan area is a major food supplier for urban dwellers - producing corn, sugar beets, potatoes, wheat, beans, beef, and dairy products. It's only fair, says Ms. Shull, that there be more balance between urban and rural interests.

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